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Your Business

News/Business. A focus on issues facing small business in the United States.

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New York 3, Romney 3, New York City 2, Us 2, Phil 2, Carol 2, Rosenwalk 2, Wab Wallace 1, Lilis 1, Carol Roth 1, Obama 1, Clint 1, Sylvia 1, Irs 1, Brooklyn 1, Nyu 1, Permence 1, Hp 1, Well As R & D. You 1, Aaron Schwartz 1,
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  MSNBC    Your Business    News/Business. A focus on issues  
   facing small business in the United States.  

    October 7, 2012
    4:30 - 5:00am PDT  

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meet the patriarch of a fifth generation new york business who makes water tanks, still made the old-fashioned way. it's time it make money, coming up next on "your business." small businesses are revitalizing the econ me.
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american express open is here to help. that's why we are proud to support your business on msnbc. hi there, everyone. welcome to cot your business". it was about win minute into the debit when small business was spoken by candidates. the amount was stricken in the amount of time obama and romney directed the issues that directly affect them. particularly in jobs and taxation. >> governor romney and i do share encouraging small business growth. in the time my tax plan already lowered taxes for 98% of
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families, i also lowered taxes for small businesses 18 times. and what i want to do is continue the tax rates, the tax cuts that we put into place for small businesses and families. >> i talked to a guy who has a very small business. he is in the electronics business in st. louis. he has four employees. he said he and his son calculated how much they pay in taxes. federal income, state sales tax, property tax cab gas tax, over 50% of what they earned. and your plan is to take the tax rate on successful small businesses from 35% to 40%. the national federation of independent businesses has said that will cost 700,000 jobs. >> what is main street's reaction? we have two of our most outspeaken regulars here to discuss. app entrepreneur and best-selling author, find him at rural 1 investing upon the com.
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carol roth, can you find her at carolroth.com. good to you you guy he. >> you too, j. >> i think it is clear that romney ran all over obama. from a small business owner's perspective he addressed the issues we have not seen addressed offer the laugh four years. most notably, how are we going to get this economy growing again because from a small business owner's perspective, that is what is going to get them hiring and make them more successful. if the economy grows, more people are buying from them. there's more confidence, and it is just a self fulfilling prophecy. >> what we are dealing with here, four years -- apart from what president obama is saying on there, what we have seen is that small business is struggling and we are way, way at the end of the food chain. we have banks that can't fail. $700 billion going into who
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knows what. snail gardens in san francisco. it is harder today because of rules like dodd-frank to get money from a bank. small banks are failing. we lost 2,000 of them in the last two or three years. that's where businesses go to get the personal loan based on my personal credibility. those are gone, and that's why we need a change. >> when you listen to them debate and you hear, this is going to affect small businesses, this is going to affect small business, i sometimes think, okay, let's get beyond the rhetoric and down to the details of it. so governor romney very early on said, if you tax people who earn more than $250,000, if you increase those taxes, then small businesses will be affected. now, not all small business will be affected. a small portion of them. is that a big deal or snn. >> go ahead. >> no, you go. >> i think on the margin, the person that just get over the edge and they get that tax, it
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might be $500 or $2500. but we are talking about an after ranch of stuff coming down the road. not just taxes which add an increment yabl problem but regulation which hads an incremental problem. the economy that is slow which adds an incremental problem. all of these things snowball. it is not one little snowball, it is the avalanche of snowballs that freezes people from hiring the next employee. >> it is all, as he said, all related together. all related to uncertainty and the fact there isn't any permence in in things like the tax code and regulation tp it is very hard for a small business to make a decision based on what is going on next year. they are planning out five years because when they hire one employee or make a major capital investment, it is very impactful on their business. which is different from big business, who says, this is going out next year, this is what we can do with our business
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now. so it is not just not the one tax issue, it is how does that feed into the uncertainty or healthcare policy. how does that feed into permence in. it all comes together. look, small business owners are entrepreneurs. they have an entrepreneurial spirit. they believe people can stand on their own and make things better. they don't want the government involved in their business. they want it run their businesses and grow the pie for everyone in america. >> all right. incredibly interesting discussion, which i wish we could have for the whole show. you both feel strongly and feel similarly and over the next few weeks, we can talk to people with all different point of view. i appreciate you coming on and talking about this. >> when your family has run a business for well over a century, how can you possibly keep it fresh? one way is to diversify the business. meet the only of rosenwalk tanks. the family has made the same thing for generations and he has joust lasted almost all of the
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competition. so how does he do it? rs andrew rosenwalk is the fourth generation owner of new york city-based rosenwalk tanks. >> i will, thank. >> you look across new york skyline. from brooklyn to manhattan to the bronx, and you will find his family's handmade wooden tanks proudly perched on rooftop after rooftop after rooftop. >> he if these tanks look old-fashioned, that's because they are. even today these wooden structures are shaped by hand with half century old tools made by his father wab wallace. this is a family owned company nearly 150 years old. >> they are described as
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abandoned relics. actually they are used today in plenty, in new buildings. the city has the strict imfire codes in new york and the tanks service that requirement. . >> as outdated as they may seem, they are in fact anything but out of date. and for that matter, so is the company itself. >> we have a city of stone and masonry and glass and they really don't look like they belong. but it is a well-used product and probably new york's best secret. >> if you want to understand the secret of how the small family held business managed to outlast more than a dozen competitors for more than four generations, you need to start with their very simple philosophy. >> you don't try to throw out something that works, you just build upon it. >> first, he studied all the aspect of the core business by getting the five key licenses and certificates needed to operate the company. thanks to some heavy-handed
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pressure early on from his father. >> i achieved the first plumbing license of the family business, the fire suppression license. license for refrigeration operation with a real estate broker's license. i went back to school on his great pressure, achieved the mba at nyu for finance. but i must admit, the master plumbing license was much more difficult than the mba. >> beyond getting him an understanding of the core business, these licenses also allow andrew to become his own subcontractors in these fields. this means better control over cost and quality. >> that may be the secret sauce that parent always pushed their children to go on to greater educational heights and to advance so they could help the company move into the next millennium century. >> lincoln bloom iii, president of new york city's hundred-year association is a also an
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entrepreneur himself. but as head of an organization which focuses on the city's oldest multigenerational enterprise, clint knows what it takes for a business to survive. >> i would say that businesses that will survive as family business, the next generation finds a way to innovate. and leverage the assets that they have. >> really keeping up with production beautifully. >> that's just what andrew has done here. first, he leveraged his labor force of wood workers by developing and sell be a line of outdoor furniture can which can be produced during winter when rooftop tank construction slows to a halt. >> they have guys that work with wood, they have wood shops. they found a way to expand their line. >> fact is, it allowed us to keep the only wood shop open for wooden waters tanks that is still in business for the city of new york. >> not only has andrew leveraged carpenters but he found another off season opportunity for his may masons and welders.
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servicing rooftop cooling towers. >> cooling towers are a window of opportunity to work on in the winter. it is almost same type of jork with jobbing and repair and replacement. it gave us protection against unemployment. >> look at his yard in queens, it may look like a junkyard, but it's not. look closely and you will see evidence of several interrelated businesses, each supporting the otheres with tools, labor and supplies, all connected in different ways to the core business and key to the rosenwalk strategy for survival in a competitive market. >> i think a lost mia lot of mi people to eat up the competition. we dent think that way. >> he says find customers in related market. >> add additional services to your menu and going elsewhere to develop on your own efforts, additional business, additional team work. >> the strategy means
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rosenwalk's collection of products and services cannot be compared directly with their competition. and as andrew puts it, haks them invisible to their competitors. >> we strive to be invisible. by being invisible, the competition can't find you. as soon as they try to find you, you're somewhere else. and you can't be seen. all of a sudden, you're outside their customer base. >> i want it point out to you some concerns that we also have with this structural steel. >> today, andrew's 23-year-old son, henry, is preparing to one day take the business into its fifth generation. >> i definitely have big shoes to fill. but i'm not worried and i'm confident that i can bring a successful future. >> while these rooftop towers may remind us of past generations, the rose enwalk familiar little be doing its best to keep them on new york city rooftops for generations to come. to stay ahead of the times, small businesses are launching
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new features on their web sites all of the time. but how do you get your customers to actually utilize new openings you are promoting? here are five ways to get client to use your knew features, courtesy of matchable.com. one, ask customers to vote on a new feature before building it. if they are engaged early on, they are more likely to be users after the launch and have a deeper connection to your company. two, get feedback during every stage of your launch. constant assessments during each stait stage of development will reduce the risk of releasing a feature that misses the mark. three, know which features are being utilized. this will help you decide on the future direction of the product. four, offer notification. before users can use a new feature, they first need to know it's there. consider using an on-line pop-up notification or sent out personalized e-mails to your list serve. and number five, allow users to share. you want your customers to tell their friends once a feature is
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live. make sure to give them ways to share with tweets, posts or social sharing buttons. when we come back, phil and carol answer your small business questions on the pros and cons of venture capital and buying a preexist company. what time is it? time for your elevator pitcher to shows us watches of his design. on every one of our cards there's a date. a reminder... that before this date, we have to exceed expectations. we have to find new ways to help make life easier, more convenient and more rewarding. it's the reason why we don't have costumers. we have members. american express. welcome in.
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creating a new product is incredibly risky tp it can take a lot of time and money, and after all that, what if no one buys it. can you survey potential customers but saying you love something is quite different than pulling out your wallet and paying for it. so what do you do? sylvia of up town soap company has figured it out. when she has a new product idea, she designs what it would look like and puts it up on her website. then if nobody clicks on it to put in their shopping cart, she knows it is not worth another dime or second. if a lot of people put it in their cart, she send an e-mail saying it is coming soon, then she develops. tip 16, test your product with your audience before actually developing it.
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time now to answer some of your business questions. phil and carol are with us. once again, dh first one is from phil, not this phil, but another phil. he writes, my partners and i are debating whether to raise venture capital dollars or grow organically. what are the pros and cons of vc dollars? >> you might not be able to get it. a fraction of 1% of all of the businesses that are out there. so you have to make sure you are eligible for it. if you do have a business, that is going to be 50 to $100 million within three to five-year period and you are eligible for venture capital then you can look at pros and cons. biggest con is it is expensive. they require a large part of your company and some onerous business terms vow to make sure you get something other than capital. maybe access, maybe information, maybe you're getting some other benefit. maybe just credibility. sometimes having a venture
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capitalist in there create credibility but they have to bring something to the table to make up for that extra expense you're taking on. >> i agree. you want to know how big you're going to get. if you don't get big enough, you won't get the capital. you also want it ask yourself, how good are you at this business? if you're really good at it, you may not need one of the really important things venture capital brings to the game, which is expertise across a lot of areas. if you really know your industry and know people in it, you may not need the other thing they bring, which is connections to other businesses and partnerships. but i think most people watching this show will be about angel investors. i would say that is a real open area. can you get $50,000 from people. >> also, the other thing is before you take any money from an outside investor who will then own part of your company and have a say, perhaps, of what you do, try to grow as big as you can organically or being scrappy so at the end you end up owning more. let's move on to the next one. alan writes, i'm shopping to purchase real e small business
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for its credit value and not income. where should i start looking for small businesses with descent d & b ratings for sale cheap? >> yeah. >> why? why are they doing this? why are they buying a business for its credit score? i can't think of one reason why you need do that. if you think it is because you want to get a bank loan and you think have you better credit, that's not how it works. so i cannot think of a reason why you would want to do that. >> i think maybe he is looking for tax credits or net operating loss or something. this is not that easy to do, actually. if you want to go find a really good small company, business brokers don't really categorize companies like that. and dunn and brad street can tell you which has good credit for really small companies. can you go there and get that information but you don't know if they are on sale. >> look into some other way to achieve your goal rather than buying a company. >> this is a question about who
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you are hiring. >> i'm getting a lot of conflicting information around 1099 contractors versus w-2 employees. is there any place can i go for the definitive answer on the parameters between 1099 contractors and w-2 employees. >> this is completely confusing for a lot of small businesses but really important because you can get in big, big trouble if you miscategorize. >> the answer, i think, maybe can you contradict me. there is no place can you go. >> oh, no, there is a place can you go. >> no way. >> www.irs.gov. it is clear. type independent contractor in -- >> no, no. >> i swear to god. you may not like the answer, phil. but they clearly define what is a w-2 employee and what is 1099. >> the truth is, this is one of the most litigated areas of business. >> this is litigated because they don't follow instructions. >> no, it is litigated because this is an intensely different
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world than 1950 when these things got set up for w-2 employees. 1950, everyone goes to a job, 8 to 5, whatever. today people work at home. they are all in that gray area that irs do the things and you are clear. half of those things are things you would apply to an independent to an independent contractor. i'm working at home. i do this my way. i can get independent contractor. why? it's a better deal. it's better for the employer and the employee. we all want it. we go into the gray area. if it was that clear, there would not be that many lawsuits on it. >> i think it's clear. it's not good clarity, i agree with you. i agree with you. i think it needs to be changed, but the information is available. >> okay. finally, here is a question about the right time to expand your product line. >> we are importing oil oils and sauces. i was wondering, what sorts of
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things should we consider before launching? >> cash flow is the biggest issue. >> first thing to look at is the roe, return on equity, return on what you are putting into it. in this marketplace, nail it quickly, fast turn around, velocity to the money. cash is king right now. there's a lot of danger and risk. a lot of danger and risk. you have to look at what's going to be the return on capital, month-by-month and get the velocity on cash. >> look at your end goal. what are you trying to achieve? is this the best product launch to get you there? in the food sector, they deal with shelf stable and refrigerated products. you have to make sure it's consistent with the overall goals. i advocate trying it out on a small scale first. if there's a way to see if
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there's market demand, test it out. see if the market wants it. >> listen to this girl. she's right. >> if he's got a website, one easy way to test it, design it, put it on your website. >> sell first, build later. yes. >> exactly. i loved having you answer these questions. you have a lot of good ideas and opinions. if you have questions for the experts go to our website, the address is openforum.com/yourbusiness. over the years we featured thread list where you can design your own t-shirts and grain surf boards. today's elevator pitcher takes a similar approach with his time pieces. watch. >> my name is aaron schwartz. our first product are modify watches, water resistant, colorful time pieces.
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we have everything for a man, woman and child. the price point is under $50. when we hit over $330,000 in sales. we have over 30% repurchase rate. we landed our first account with best buy. we have done things with rock the vote, google, hp and other corporations. we are looking to raise $750,000 in change for 20% of the company. it's new inventory as well as r & d. you can see more of modify watches.com. >> you have that down. that was good. congratulations, these are fun. they are very cool. i'll take a look at this while you talk about it. carol, how did he do? >> phenomenally well. i have done so many of these and i brutalize everyone. i thought you did a fantastic job.
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you come across confident, knowledgeable. you have an existing product. you have taken a lot of risk out of it. you told us how much money and what it's for. i want another meeting. >> i would love it if you told me, are you cash flow positive yet. i would like to see that. if you don't, stay away from it, like you did. if you don't bring it up, you are not. that means my cash is more at risk than if you were cash flow positive. other than that, home run. >> look how cool this is. you get to change the watch, the bands. >> we have two sizes, too. >> it's not just the watch, he's going into other products. if it was one-trick pony, i would be more impressed. you are going into footwear and sunglasses, very intriguing. >> thank you very much. thanks for coming on the program. you guys are great as alwayses. thank you so much. on july 1, 1978, the
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container store opened their doors in dallas filled with colorful milk crates and straw baskets. it was devoted solely to storage products. they have opened locations from coast-to-coast and featured on fortune magazine's list of best 100 companies to work for. we sat down with the ceo and co-founder to talk about minding the wake and getting the customer to dance in this learning from the pros. ♪ >> you know, a boat's wake as you move along the water, the back of the boat is a triangular wave, they call it a wake. the faster you go, the bigger it becomes. everything you do and everything you don't do impacts business and the people around you. we teach that to our people.
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when you get 6,000 people all mindful of their wakes and understanding that, isn't it nice we do make a difference? the average retailer only invests eight hours of training for each employee. eight hours. i mean it's shameful, really. there's nothing worse than being on the floor talking about a product you know nothing about. at the container store, 263 hours for each employee. it's just the beginning. ♪ >> if you really and truly put the employee first, really and truly, they will take better care of the customer. the better you take care of your people, the better they'll take care of the customer. you know, a customer that's ridiculously well taken care of and loves your store is going to make sure the economics of it
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works. i always have my briefcase with me. it's with me when i go fishing. it's with me all the time. the artist of life blurs the distinction between work and play. we are always playing and always working. when claude monet was painting water lilis, was he working or playing? there's no reason for the container store to exist if we sell the same products everybody else does. we have to come up with wonderful innovative products people get excited about. we want to delight and thrill you so for the first few weeks you do a little dance and love it. if you feel that way, you'll show it to your sister-in-law and next door neighbor. the test is, can you make somebody do the dance with something like a trash can.
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we devote our lives to make sure they are the most stunning perfect thing that fits in the corner. even a trash can can make you smile. >> do you suffer from a clogged inbox that stops you from getting to the e-mails that really matter? check out our website of the week. awayfind.com will monitor your e-mail and alert you only of e-mails that need your immediate attention. set filters to alert you. you can also choose to get voice versions of the e-mails so that you can work on the go. to learn more about today's show, click on our website. it's openforum.com/yourbusiness. you'll find all of today's segments plus web exclusive content with more information to help your business grow. you can follow us on twitter. don't forget to become a fan on
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facebook. we love getting your feedback. next week, a former model with a passion for fashion and flats leads her to start an e-commerce site. >> it was mind boggling in the 21st century, we didn't have an online platform to allow you to purchase goods from paris. unique, one of a kind pairs of shoes. >> how she's setting her company apart from the rest. and bringing content is king to life every day. until then, i'm j.j. ramburg. we make your business our business. we make a simple thing. a thing that helps you buy other things. but plenty of companies do that. so we make something else.